Market-based instruments spreading across Europe

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News
Published 26 Jan 2006
Last modified 28 Jun 2016

2min read

Market based instruments (MBIs), such as environment taxes and emission trading schemes, are increasingly being used to implement environmental policy across Europe. This is according to a report released by the European Environment Agency at a meeting of high-level economists in Copenhagen today.

Market based instruments (MBIs), such as environment taxes and emission trading schemes, are increasingly being used to implement environmental policy across Europe. This is according to a report released by the European Environment Agency at a meeting of high-level economists in Copenhagen today.

The MBI report

The report, 'Using the market for cost-effective environment policy - market-based instruments in Europe,' aims to demystify MBIs for the generalist by offering an easy-to-read 'what', 'why', 'how' and 'who' approach to the subject. It also outlines the kinds of political barriers which MBIs face, and the methods needed to overcome them

Environmental taxes and emissions trading in particular have the potential to improve cost-effectiveness of environment policy, according to the report. The importance of Emissions Trading Schemes as a major new MBI in Europe is also highlighted, and the report points out that such trading schemes work better with bigger markets and more participants.

Environmental economists network meeting

The report was launched at the 4th meeting of the high- level Environmental Economists Network at the EEA in Copenhagen. The EEA, in collaboration with the European Commission (Directorate General for the Environment), established the network in 2004. Its main purpose is to act as early radar for new environmental policies, and provide advice on the economic aspects contained within policy.

The Network is also intended to provide an economic connection to the scientific and research community, and advice is sought on developments in theoretical and applied economics relevant to environment issues facing the European Environment Agency, DG ENV and its partners. Meetings take place once or twice a year in Brussels or Copenhagen, and so far the Network has dealt with issues such as climate change policies and impact assessment.

The focus of today's meeting is biodiversity, the cost of inaction and links between environment policy, innovation and competitiveness. The event will be attended by leading environmental economists from around the world.